The practice of outsourcing a job or task that is traditionally performed by employees or a contracted company to a non-organized, usually large group of people, generally in the form of an open call or competition.
A: "I wish I could write a dictionary for all the cool slang out there, but it's too big a task for me alone, and I can't afford to pay anyone else to do it."
B: "Crowdsourcing is the solution to your problem.. I know -- you should make a website called urbandicitonary.com, or something. People will just fill it up and edit and moderate all on their own, and you won't have to pay a dime!"
See also the X PRIZE, Wikipedia, Netflix Prize, Millennium Prize, etc.